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Marquette Properties has doubled down in Brisbane’s Golden Triangle office precinct and exchanged contracts on a $420-million deal for the landmark Blue Tower.
The acquisition is a solid bet on the post-pandemic future of the city's prime office market.
The Brisbane-based fund manager has partnered with Lendlease’s $1.5-billion REP (Real Estate Partners) 4 Fund to secure the Blue Tower.
“It’s a Brisbane landmark and we’re very proud Brisbane people,” Marquette managing director Toby Lewis said.
“So we’re thrilled.
“We feel the city’s prime office assets are in a really good space with great levels of demand and we look forward to capitalising on that.”
Named for its distinctive blue glass facade, the 32-level office building at 12 Creek Street has been offloaded by Dexus as part of a $1.75 billion portfolio revamp.
Australia’s largest office landlord acquired the tower for $241.6 million in 2012 and took a value-add investment strategy, adding another boutique office building, The Annex—complete with rooftop terrace—to the site.
Settlement of the latest deal is due at the end of March and will bring Marquette’s Golden Triangle play to $705 million.
Last year, the fund manager inked a $285-million deal with Dexus to secure the precinct’s other shiny office icon, the neighbouring 32-level Gold Tower at 10 Creek Street.
“They are two towers that are timeless and classic. I’m looking at them right now,” Lewis said. “They were built to last and I think they’ve worn in rather than worn out.”
Dexus chief investment officer Ross Du Vernet said the sale—understood to be conditional on Foreign Investment Review Board approval—was expected to realise net proceeds of $391 million that would be used to repay debt.
“This divestment enables us to recycle capital into our high returning development pipeline, with our Waterfront Brisbane development expected to commence shortly given leasing momentum,” he said.
“We are excited about the opportunity to focus our leasing, asset management and development efforts on this new development project.”
Both the Blue and Gold towers sit directly opposite Dexus’s $2.1-billion Waterfront Brisbane project that will replace the Eagle Street Pier complex with two new office towers, a retail precinct, river walk and public open space.
“We’re the biggest advocates for that project,” Lewis said. “We liken it to Barangaroo in Sydney … and our assets will get to ride on the coat-tails of the amazing amenity and beautiful buildings that Dexus will deliver.”
The Blue Tower complex is being purchased more than 90 per cent occupied.
Built in the mid-1980s, over the years it has provided digs for a who’s who of blue-chip tenants, including a number of resource and mining giants as well as the Macquarie Bank and the Reserve Bank of Australia.
Along with The Annex—the 14-storey addition to the 3026sq m Creek Street site completed in 2021—the holding has a net lettable area of 38,746sq m of A-grade office space.
It was held jointly by Dexus and the Dexus Wholesale Property Fund.
The acquisition boosts Marquette’s portfolio to $1.2 billion-worth of assets under management, four of them Brisbane CBD properties.
As well as the Blue Tower and the Gold Tower, they include the refurbished 27-storey Highpoint office tower at 288 Edward Street and prime corner four-level Queen Street Mall retail/office asset at 130 Queen Street.
